This Warren Buffett-Approved Investment Could Turn $300 Per Month into $1 Million

Billionaire investor Warren Buffett built his fortune through his ability to pick out really great companies, get in at a good price, and stick with these players for the long haul. This helped him deliver a market-beating compounded annual gain during his 60 years at the helm of Berkshire Hathaway.

Buffett turned over the chief executive officer job to Greg Abel a few months ago, but the Oracle of Omaha, as Buffett is often called, remains chairman and hasn't left the world of investing. And investors continue to look to him for investing inspiration.

With this in mind, let's consider an investment that Buffett has recommended time and time again. It's an asset he's held in the past, and he recommends it particularly to the non-professional investor. In fact, this Buffett-approved investment may even turn $300 per month into $1 million over time. Let's check out this evergreen buy -- and see how it could help you grow wealth.

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Buffett's investing strategy

As I mentioned, Buffett has demonstrated his strength in identifying companies that have what it takes to deliver returns over time. He looks for a solid moat, or competitive advantage, smart management, and other important qualities that may lead to ongoing success. Meanwhile, Buffett also pays close attention to valuation -- and will only hit the buy button if the price is reasonable.

So you might be expecting that the asset I'm going to talk about here is one of Buffett's most beloved stocks, such as Coca-Cola or American Express -- well-known companies he's held for many years. But it's not. Instead, this investment that Buffett wholeheartedly recommends is something that will offer you exposure to a wide variety of winners. I'm talking about an S&P 500 index fund.

In the past, Buffett has spoken of the Vanguard S&P 500 ETF (NYSEMKT: VOO), an exchange-traded fund he held in the Berkshire Hathaway portfolio for a time. Why invest in such a fund? Here's what Buffett had to say in his 2013 letter to shareholders:

The non-professional investor's goal should be "to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal."

Buffett believes in the American business

This is based on Buffett's idea that American businesses have excelled over time and have what it takes to do the same well into the future. In fact, Buffett is so committed to this idea that he said he's instructed a trustee to put 90% of his cash into an S&P 500 index fund upon his death for the benefit of his wife.

This fund, mimicking the performance of the S&P 500, is a fantastic idea because the major benchmark has always delivered a win over time. Since the S&P 500's creation as a 500-company index in the late 1950s, it's posted an average annual return of 10%. This means that, by investing in an S&P 500 ETF, you don't have to worry about picking just the right stock or the right bunch of stocks. By investing in this group of winners, you're likely to gain over the long haul.

But can this actually help make you a millionaire? It's very possible if you take advantage of the magic of compounding. Let's consider an example. If you make an initial investment of $1,000 in the Vanguard S&P 500 fund, and then add $300 to that on a monthly basis over 35 years, your investment may reach more than $1 million. That's considering the S&P 500 continues to deliver a 10% average annual return.

And even if your investment horizon is shorter, as long as you invest in this ETF over many years and throughout investment cycles, you're likely to generate a win. Meanwhile, if you combine investment in an S&P 500 ETF with a smart stock picking strategy, you really could supercharge your ability to build wealth over time -- just like billionaire investor Warren Buffett.

American Express is an advertising partner of Motley Fool Money. Adria Cimino has positions in American Express. The Motley Fool has positions in and recommends American Express, Berkshire Hathaway, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.